Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[Temp_JayJuanGee]

anyway back on topic:

Based on the weekly stoch RSI: This is either about to shoot way past ATH or about to crash hard, one or the other, but I can't tell which. I guess this analysis doesn't help me much.

I suspected that if we passed 750 it would be the start of the ramping up and FOMO, but it is looking lacklustre.

Maybe it is unmentionable OT uncertainties (ahem...) maybe it's just not going to happen but the cup and handle looked perfect and the rise has been steady for a year.  I really thought it would be around now we'd see the new 2013-style run, but it's awfully quiet out there.

I was thinking (as were many) that a run up was inevitable.  Now I haven't a clue... The conditions are good, so why is nothing happening?  A crash would no longer surprise me either, this is Bitcoin, after all.

It starts slow only to pick up steam. Volume is showing good signs, constantly increasing on the weekly time frame.

There are a variety of scenarios that could play out, and any of us could still proclaim that we were correct regarding the various resistance points and at what point we can relax because FOMO and additional upward momentum is kicking in.

Sometimes my thinking can evolve about the topic too, but it still seems that $750 is too low to get excited and also $780 is too low to get excited, so we have to break sufficiently beyond those areas in order to experience some of the contagion of upward momentum, FOMO etc - also, even though we could experience considerable upward pushes at any time by some bullwhale, any such upward push seems that it could end up being a bit premature because between the rise from lower $600s to mid $700s, we have really only experienced one significant downward correction from $740s to $670-ish, and really that is only about 10% correction on about a 25% rise (which also could be considered less than a 30% retrace of gains) . 

Sure, there is no requirement that any kind of meaningful downward correction has to take place, but I would be surprised if BTC prices get passed mid $800s without at least one more significant correction, that could occur at anytime whether that is in this $750 arena, or upper $700s or lower $800s.  We also should keep in mind that there are a lot more ways to short bitcoin, as compared with late 2013.


Sure there seems to be ongoing upwards price pressures that seems to including relatively low trade volume levels, so there has not really been any real and meaningful price battle (yet) of the upwards and onwards price movement, and it is also possible that if bearwhales wait too long to attempt to wage such battle to bring prices back down, they may lose their ability to push prices downward and to interfere with the ongoing upwards movement that pretty much has been happening for a year now. 

That's my tentative thinking, yet you won't find me complaining if I turn out to be 100% wrong and BTC prices just go shooting up without any more meaningful downwards correction attempts.

[Temp_JayJuanGee]

You do realize that your purchasing of more bitcoin is not the same as a capital loss?

https://www.irs.gov/uac/ten-facts-that-you-should-know-about-capital-gains-and-losses

It seems that you are missing the thrust of my question regarding whether or not to report when there is no gain because you have purchased more during the year.  I am not suggesting or implying that buying more during the year is a loss; however, if a person is moving bitcoins around multiple exchanges, then some exchanges there may be multiple sales that are bought back on another exchange.  One exchange may think that you have realized a gain, but if you look at other exchanges and transactions, then those coins were largely bought back.

So, the question is how to report or if to report in order to clarify that no actual realized gain was experienced because those coins were bought back.

I am not sure if the section on wash in the instructions to form D adequately address the issue.

https://www.irs.gov/pub/irs-pdf/i1040sd.pdf

The wash section seems to suggest that if you buy back substantially similar assets within 30 days, then you can treat such buy backs as a wash, but such situation does not really seem to address record keeping very well or whether any reporting requirements exist.  In any event, it could be reasonable to just keep records of the various buy backs, and only provide information regarding such if the IRS asks, otherwise there is no need to report as long as there is no gain and you are buying back more than you are selling.

You incur gains and losses through the sale of an asset, not through purchasing more......Each time you sell an asset you subtract the sale price from the purchase price, if there is a profit report it as such; it is a loss due to selling the asset at a lower than purchase price. Note each scenario is due to the selling of an asset. If you are a small business it is not considered a capital gain but income for your business which is taxed differently.

Note the above in red is erroneous. You cannot simply purchase more to offset your gains as a person, as a business: yes.

"You can't deduct losses from wash
sales unless the loss was incurred in the
ordinary course of your business as a
dealer in stock or securities. "

O.k.  Your assertion, more or less, that the wash section does not apply to individuals could be accurate.

But I question your attempt to further clarify this matter by apparent discounting of personal abilities to buy back in order to not realize a gain.

For example, if I were to put all of my at-issue bitcoins on coinbase (more accurately GDAX), there is no taxable event of the various trades of coins that I make; however, when I go to withdraw the coins, then there is a taxable event.  

I am suggesting that if I sell the coins on GDAX and buy them back on Gemini, then there should be no taxable event because I am buying them back.  You are suggesting that such an ability to not count that as a taxable event only applies to businesses.  This year, I am going to make some accounting in my taxes, and I doubt that I am going to account the matter in the way that you are suggesting unless the authority seems to be abundantly clear that I have to count every cashing out as a gain, even though I bought back more than I sold.  Sounds like made up nonsense to me that I would want to cause my taxes to be higher than justifiable when there seems to be a reasonable accounting that allows me to continue to count the whole matter as an investment portfolio that has been continued to be held by me throughout the year and continuing to increase in the total amount of fiat that is invested in such portfolio, even though the portfolio covers more than 10 locations (including at least 6 exchanges) in which they are held.

 

[criptix]

^

In that case you might want to argue that the exchanges holding your btc are not much more then a bank account.

Nevertheless i would be quite interested in the outcome - would be very nice if you could tell us afterwards (how the irs wanted to tax you).

[Temp_JayJuanGee]

my quantity of BTC bought remains 1 to 2%, or even a bit more, greater than the amount sold. 

You sound American? That's not the way it works. The selling of an asset is a taxable event. You figure out your net profit or loss based upon the price you paid for the assets sold. At the time of the taxable event. You don't get to figure out net based upon what it takes to replace that asset in the future. Sure, there are accounting details such as LIFO or FIFO and whatnot, but the fundamental calculus is what it is.

IANAL, etc.

Yes, I am considering this matter under USA tax laws, and yes, based on your response and some of the other responses, including information in poolminor's responses, I may have to consider ways to change some of my accounting. 

I do have until about April 2017 before I file taxes on 2016, so I might be able to come to some resolution on the topic that I feel is reasonable and acceptable and would not necessarily trigger either an audit or some kind of IRS penalty.

[Killerpotleaf]

...
unless the authority seems to be abundantly clear that I have to count every cashing out as a gain, even though I bought back more than I sold.  Sounds like made up nonsense
...

i think your right...
you only incur capital gains tax if you have MOFO capital gains!
buying and selling, and sending money to and from your bank account, is not subject to taxation.
what i did one year when i was trading more heavily and doing some arbitrage, is i outlined all the cash in and outs to and from my bank, add up all the in's and the out's subtracted the totals and this gave me my capital gains for the year.
 
i've since given up that practice in favor of simply forever holding BTC  

[Searing]

...
unless the authority seems to be abundantly clear that I have to count every cashing out as a gain, even though I bought back more than I sold.  Sounds like made up nonsense
...

i think your right...
you only incur capital gains tax if you have MOFO capital gains!
buying and selling, and sending money to and from your bank account, is not subject to taxation.
what i did one year when i was trading more heavily and doing some arbitrage, is i outlined all the cash in and outs to and from my bank, add up all the in's and the out's subtracted the totals and this gave me my capital gains for the year.
 
i've since given up that practice in favor of simply forever holding BTC  

I may be confused. But if the IRS just does a blanket hit on coinbase and states it sees you have moved say 8k of BTC to cash. Can they not just ask what the heck you are doing anyway
even if it is just a wash sending money to and from like a bank. Seems to me they can 'fish' on the assumption of guilt ..just for the fact you have traded BTC for cash at whatever point
in time you moved such to cash. Coinbase already has a system in place where they ask you WHAT you are moving BTC for. Multiple Choice. At least at the 8k level. (I put Mining). So it seems to me they are setup to blanket tell the IRS whatever they want already...fishing for BTC guilt or not.

[Temp_JayJuanGee]

...
unless the authority seems to be abundantly clear that I have to count every cashing out as a gain, even though I bought back more than I sold.  Sounds like made up nonsense
...

i think your right...
you only incur capital gains tax if you have MOFO capital gains!
buying and selling, and sending money to and from your bank account, is not subject to taxation.
what i did one year when i was trading more heavily and doing some arbitrage, is i outlined all the cash in and outs to and from my bank, add up all the in's and the out's subtracted the totals and this gave me my capital gains for the year.
 
i've since given up that practice in favor of simply forever holding BTC  

You are saying something that kind of supports my inclinations,  yet on the other hand, we cannot really wish away the potential that there are actual gains "on paper" that end up being folded back into bitcoin.

Accordingly, let's say for example I bought and sold $100k of BTC over the course of the year for an average price of $500 (that is from coins more than a year old) and sold them for an average price of $700.  That would be 133.3 BTC sold and $26,666 of gain (on paper) ($200 x 133.3). 

That's also why I was suggesting, in one of my earlier posts, that if the amount of BTC traded were of a fiat value of less than $10k, then maybe it would not matter as much if you failed to report $2,666 in gains (on paper) versus $26,666 in gains (on paper)?

  Currently, my trading numbers for 2016 seem to be somewhere between these two (more than $10k but less than $100k), but if BTC prices appreciate more, we could imagine scenarios in which the gains on paper numbers become a lot larger, too.

If I traded all of those BTC on one exchange, then I would have never been considered to have realized any of the gain, but as soon as I cashed them out to my bank and then move them to another exchange, then I would have been considered to realize a gain (from the cashing out). 

On one exchange versus between exchanges kind of seems like a distinction without a difference (except maybe  it becomes more of a policing issue for the IRS to be able to verify what you are doing versus if they were to allow arbitraging).

For tax purposes, if I have "on paper" $26,666 in capital gains income, then that would be $4k in taxes for money that I never had used in any kind of way because I reinvested it within a substantially short period of time.

[Killerpotleaf]

...
unless the authority seems to be abundantly clear that I have to count every cashing out as a gain, even though I bought back more than I sold.  Sounds like made up nonsense
...

i think your right...
you only incur capital gains tax if you have MOFO capital gains!
buying and selling, and sending money to and from your bank account, is not subject to taxation.
what i did one year when i was trading more heavily and doing some arbitrage, is i outlined all the cash in and outs to and from my bank, add up all the in's and the out's subtracted the totals and this gave me my capital gains for the year.
 
i've since given up that practice in favor of simply forever holding BTC  

You are saying something that kind of supports my inclinations,  yet on the other hand, we cannot really wish away the potential that there are actual gains "on paper" that end up being folded back into bitcoin.

Accordingly, let's say for example I bought and sold $100k of BTC over the course of the year for an average price of $500 (that is from coins more than a year old) and sold them for an average price of $700.  That would be 133.3 BTC sold and $26,666 of gain (on paper) ($200 x 133.3).  

That's also why I was suggesting, in one of my earlier posts, that if the amount of BTC traded were of a fiat value of less than $10k, then maybe it would not matter as much if you failed to report $2,666 in gains (on paper) versus $26,666 in gains (on paper)?

  Currently, my trading numbers for 2016 seem to be somewhere between these two (more than $10k but less than $100k), but if BTC prices appreciate more, we could imagine scenarios in which the gains on paper numbers become a lot larger, too.

If I traded all of those BTC on one exchange, then I would have never been considered to have realized any of the gain, but as soon as I cashed them out to my bank and then move them to another exchange, then I would have been considered to realize a gain (from the cashing out).  

On one exchange versus between exchanges kind of seems like a distinction without a difference (except maybe  it becomes more of a policing issue for the IRS to be able to verify what you are doing versus if they were to allow arbitraging).

For tax purposes, if I have "on paper" $26,666 in capital gains income, then that would be $4k in taxes for money that I never had used in any kind of way because I reinvested it within a substantially short period of time.

you'd really need to consult an accountant...

it could be every time you press the F'ing sell button ( never mind cashing to your bank ) capital gains tax may apply.

but i would assume the rules are profoundly complex and if you simply declare part of your income as coming from "hobbyist trading" your off the hook for some it(untill you actually "cash out for real"). or some loop hole like that...

[Killerpotleaf]

i think the moral of the story here is, dont press the sell button!! 

[iikun]

I think the best move here would be to troll the IRS first to test the waters. Create some losses trading BTC and then try to offset other income using those losses. If they accept it, lesson learned and you know their approach for the future. If they reject it then it is clear they cannot tax it either (quid pro quo). You'd want to ensure perfect separation of your current activities though, I'm assuming you've made a clear trading profit for the year.

[sirazimuth]

we need a new rocket meme thats never been posted. damned if i can find one...

[TERA]

What if you're trade altcoins against btc but never sell the btc. Do you pay taxes even if you haven't sold,  and how do you base the value of the btc.

[Ted E. Bare]

That is completely dependent on where you live. For example where I'm located I have to pay taxes over my total combined savings at the end of the year, cryptocurrencies included, but trades are in no way taxed. Very straightforward.

[buwaytress]

my quantity of BTC bought remains 1 to 2%, or even a bit more, greater than the amount sold. 

You sound American? That's not the way it works. The selling of an asset is a taxable event. You figure out your net profit or loss based upon the price you paid for the assets sold. At the time of the taxable event. You don't get to figure out net based upon what it takes to replace that asset in the future. Sure, there are accounting details such as LIFO or FIFO and whatnot, but the fundamental calculus is what it is.

IANAL, etc.

What if bitcoin is seen by a government not as an asset or property but merely currency? Or does it not matter as it is "sold". I know in places currency exchange is only levied a service tax.

[Killerpotleaf]

A donation of securities to a registered charity or private foundation does not trigger a capital gain.

[Killerpotleaf]

If you sell an asset for a capital gain but do not expect to receive the money right away, you may be able to claim a reserve or defer the capital gain until a later time.

Day traders make a living buying and selling stocks, and because it's their job, capital gains taxation may not apply.

A day trader is a person who makes his living buying, selling and managing these transactions. A person who works in the investment industry and makes frequent short-term investment turnovers, such as a stockbroker, for example, may be considered a day trader as well.

its different everywhere... poeple really need to talk to an accountant, and or consider secretly HODLing like a mofo till the end of time

[Holliday]

What if you're trade altcoins against btc but never sell the btc. Do you pay taxes even if you haven't sold,  and how do you base the value of the btc.

Trading one asset for another is a taxable event.

[Elwar]

I think most of us who have been in Bitcoin for several years will be deciding between doing our accounting First In First Out (FIFO) or Last In First Out (LIFO). You have to consider that the capital gains for short term gains is 10 to 20 percent higher than for long term gains (over a year). But the bitcoin price this year and in previous years has gone up so much that such a difference is not enough (for example, I started buying at $20 so I would not choose FIFO because my gains would be over 1000% on my initial coins).

For me, I don't think I have ever sold bitcoins (on Coinbase) for fiat. I usually spend it. So I would choose LIFO because I have my money converted to bitcoins for each paycheck. So the gains in any given 2 week period are minimal, over the course of the year when one week may be down, one may be up it will add up to a very small amount.

In the future if I were to want to cash out a large portion of my bitcoins or spend a large amount I would probably structure my holdings via some sort of Caymen Islands type of thing as opposed to paying the capital gains on thousands of percent in gains.

This is usually where people say "consult an attorney" or whatever. Fuck that, you have the Internet and you probably know a lot more about Bitcoin than those assholes. Do your own research and you'll find the best way forward.

[jbreher]

What if you're trade altcoins against btc but never sell the btc. Do you pay taxes even if you haven't sold,  

No. The taxable event is the selling of some asset for governmentally-recognized money - such as USD.

and how do you base the value of the btc.

You have to track the value of each trade, allocating the percentage of source value to trade value, tracing the eventual sale back to the original purchase price.

Again, IANAL, nor a CPA...

[edgar]

we need a new rocket meme thats never been posted. damned if i can find one...

?